European retailer invests billions in cloud

Schwarz Group, the German retail conglomerate behind the Lidl supermarket chain, is undertaking a major digital infrastructure investment as concerns over control of data intensify across Europe. The company’s technology division, Schwarz Digits, is positioning itself to build cloud capacity designed around European regulatory frameworks and governance standards.

The initiative centres on an €11bn data centre development in Lübbenau, south of Berlin, built on the site of a former power plant. The project, which broke ground in November 2025, represents the largest investment in the company’s history since its founding in 1930. According to Rolf Schumann, chief digital officer of Schwarz Group and co-chief executive of Schwarz Digits, the location and structure of future data infrastructure will increasingly be influenced by national sovereignty considerations rather than purely technical requirements. He argues that within a few years governments and businesses will prioritise where data is stored, the laws governing it and the values underpinning those frameworks.

Schwarz Digits was established in September 2023 to provide cloud, IT, cyber security and ecommerce services to the group and external clients. Through its StackIT platform, the company aims to offer a European alternative to existing hyperscale cloud providers. Hardware for the company’s data centres is being sourced from several regions, including Japan, in an effort to strengthen resilience and reduce reliance on single suppliers.

Schumann links the strategy to broader geopolitical developments and rising concern in Europe about dependence on technology providers from the US and China. He notes that in discussions with cloud and software vendors the company was unable to obtain clear answers on where its data was physically stored or which legal frameworks applied to it. Questions also emerged about whether data handled by software providers might be used to train digital systems.

Schwarz Group has since ended its use of Microsoft office software, saying the company’s approach to data governance did not match its internal standards. The decision followed concerns raised in 2023 after Microsoft disclosed that attackers linked to China may have accessed a leaked master key capable of exposing sensitive cloud data.

Although high energy costs have historically limited European demand for large data centre projects, Schumann believes control over digital infrastructure will increasingly shape investment choices as artificial intelligence systems rely on the data they process.